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India’s Ist Fortnightly Newspaper For Beverages, Food & Allied Industries

Vol.5, Issue 4, Nov (II) 2012, Rs. 20/-

Prez hails role of cooperatives in development C

ooperatives are pivotal institutions for bringing socioeconomic development for inclusive growth in rural areas, President Pranab Mukherjee said Saturday. There are six lakh cooperatives with 24 crore members in India. "Cooperatives in India have made a visible and significant contribution to the overall economic growth of our economy. This is especially so in the sectors of agricultural credit, sugar,

dairy, textiles, fisheries, distribution of fertilizers and agricultural inputs, storage and marketing," the president said here at a function to give biennial excellence awards to the cooperative societies. "Cooperatives in our country are pivotal institutions for bringing socio-economic development for inclusive growth in rural areas," he said. Three cooperative societies won the award at national level, and 24 societies were awarded at the state level.

The president added with a network of six lakh cooperatives and a membership base of 24 crore, the Indian cooperative movement has proved to be an effective economic instrument for ensuring growth with equity and inclusiveness. Union Agriculture and Food Processing Minister Sharad Pawar, minister of state Charan Das Mahant, and Managing Director of National Cooperative Development Corporation (NCDC) C.B. Paliwal were also present at the function.

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Beverages & Food Processing Times-Nov-II-2012




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Beverages & Food Processing Times-Nov-II-2012



How did Vinita Bali, MD at Britannia, prove sceptics wrong with 'Eat Healthy Think Better' campaign


dark horse is NutriChoice, which apparently accounts for nearly 75% of an admittedly small but rapidly growing health snacks niche. The

Britannia. She'd taken charge after several years of working overseas for Coca-Cola, and at marketing consultancy the Zyman Group. In 2005, brand Britannia had lost some of its mojo, being trounced when it came to exciting products by new and nimble competitors like ITC's Sunfeast. Bali admitted candidly at the time, "This was a company that was very innovative. For the last three or four years, it did not use this ability. We are beginning to use that muscle again." Cut to the present and the competitive scenario is if anything, even more challenging. Homegrown rivals like Parle, ITC and Priya Gold are still going strong. Brands like Kraft's Oreo and United Biscuits McVitie's which used to be mainstays of 'import' food stores are now starting to make their presence felt across the retail spectrum. Against this backdrop Britannia has clocked fairly impressive growth. If it had a turnover of Rs 1,666 crore in 2004, its total revenue at the close of financial year 2012 was Rs 4,974.19 crore â₏� a three-fold increase over eight years. Brands in the health and nutrition space have been among the growth drivers according to Britannia. That the charge would be driven in part by Milk Bikis and Marie Gold comes as no surprise. Both brands have been in the Britannia stable for decades. Industry sources claim they command a share of approximately 55% and 50% respectively in their categories. The

change started according to Bali when the management looked at Britannia's tagline Swasth Khao, Tanman Jagao aka Eat Healthy, Think Better. It had been conceived of in 1997 by former Britannia managing director and CEO Sunil Alagh. Speaking of its genesis, Alagh says it lay in representing a change from a mere biscuit company to a food company which included breads, cakes, cheese and milk. He elaborates, "It also needed to represent a major thrust in the mass glucose biscuit market, with Tiger. A contemporary image was essential, so I appealed to the Indian psyche to create a distinct position which not only played on taste ie a healthy stomach leads to better thinking. It was a combination of mind and body." The other option was 'Eat Heathy, Live Better', but 'Think Better' finally made the cut since "living" was more ostentatious and related to the body as opposed to "thinking" which connected to the mind. Says Alagh, "It worked beautifully and propelled Britannia to the Number 1 food brand in India through Tiger and its new positioning." While many new bosses have been known to jettison slogans and marketing concepts from a previous regime, Bali believed the tagline was in fact being underutilised: "The light bulb went off when we said we have a fabulous slogan but it's just a slogan so far. For us the challenge was how do we convert "swasth khao"

lmost seven years ago, Vinita Bali met Brand Equityto discuss her game plan for

to a brand credo that gets activated?" Britannia's initial approach to health under Bali was radically different. Plans were afoot for the national rollout of a milk based drink named Anlene. Initially launched in the East, it was aimed specifically at women, to combat osteoporosis. However Anlene didn't go beyond the test market stage. Team Britannia began to learn that while health concerns were on the rise, the Indian consumer's mindspace was dominated by more common killers: diabetes and heart disease. Explaining a problem and then offering a solution was a task that the biscuit giant did not feel equal to. Says Bali, "When you ask 'am I using the assets I have in the most effective and productive manner?' you get to where we got to. We opted to use what we have whether a brand, consumer insight or way to market and suffuse that with health propositions."

Britannia's initial approach to health under Bali was radically different. Plans were afoot for the national rollout of a milk based drink named Anlene. Initially launched in the East, it was aimed specifically at women, to combat osteoporosis. However Anlene didn't go beyond the test market stage. Team Britannia began to learn that while health concerns were on the rise, the Indian consumer's mindspace was dominated by more common killers: diabetes and heart disease. Explaining a problem and then offering a solution was a task that the biscuit giant did not feel equal to. Says Bali, "When you ask 'am I using the assets I have in the most effective and productive manner?' you get to where we got to. We opted to use what we have whether a brand, consumer insight or way to market and suffuse that with health propositions."

Beverages & Food Processing Times-Nov-II-2012



Can Cadbury, Parle, Britannia replace mithai with chocolates, confectionery and biscuits


ven the coldest and most antiseptic of office spaces in India is not immune to the charms of the festive season, a time that starts roughly around Navratri and extends all the way up to New Year. India may have passed over entirely onHalloween and trick or treating but office drones can usually be seen through this period, trawling from deskto-desk getting their fill of mithai, dry fruits and assorted calorific treats. However, over the years, mithai and dry fruits have been in many cases replaced by boxes of chocolates and biscuits. These are fought over and consumed with equal gusto, by the average office goer. It's a small but significant sign that all is not what it used to be in the Indian gifting space. So what really happened here? Why did a mithai eating nation become so sweet on chocolates? Ankur Bisen, VP-retail, Technopak offers some reasons: "Things that are inefficient are getting rejected by customers. Changing consumer tastes, exposure, being well-travelled are all spurring change in consumption patterns." While these are socioeconomic reasons, if one company has to be credited (or blamed) for this revolution, it is Cadbury. From being sold on the 'sweets for kids' platform through the 70s and 80s, in the mid-90s Cadbury decided it also wanted to appeal to the young adult. That was when Shimona broke into a jig and ran out to the cricket field to congratulate her batsman boyfriend on his ton in a memorable commercial for Cadbury Dairy Milk. Besides increasing appeal, Cadbury also tweaked its stock keeping units (SKUs). It launched a chocolate at ` 5 to increase preference for the brand among customers across the length of India. "We wanted to give customers more reason to consume chocolate. We changed from being a product preferred by a few affluent people to something a lot of people can pick up," explains Anil Vishwanathan, VP, Cadbury India. Cadbury embarked on what Vishwanathan calls "The Meetha Journey" in 2004, which was also the year when its brand Celebrations, focused specifically on the gifting segment, was launched. An internal ethnographic research done by the company zeroed in on the various occasions in an Indian's life when he consumes sweets or meetha, a space almost totally dominated by traditional mithai at the time. So be it passing an exam, or buying a vehicle, or even celebrating payday, a variety of occasions was identified as areas of opportunity. Rohit Srivastava, EVP, Contract India, the agency which works with Cadbury on its Celebrations range narrates an incident. "While doing research it was as if serendipity struck. In Delhi, people load their cars with 100-

200 gift boxes during Diwali! It is huge!" explains Srivastava. Ravi Deshpande, chairman and chief creative officer, Contract India recalls: "When we realised that for achocolate company to grow further gifting would have to play a key role, we started by putting together our existing array of

Vishwanathan is happy about the progress Cadbury has made in India. "The category context and evolution for Cadbury is unique to India. There is nothing like this internationally because there meetha means chocolate," he says. While the brand continues to make inroads in urban India, Vishwanathan

chocolates — Dairy Milk, Gems, 5 Star — in an attractive gift pack to test the potential of chocolates as a gifting option. This gave birth to brand Cadbury Celebrations." Diwali was the low hanging fruit and proved to be the largest playing ground for chocolate gifting in the years to come. Next came Raksha Bandhan, because of what Deshpande calls "teens' natural affinity towards chocolates." Today the team behind Celebrations have identified more occasions and given Indians many reasons to gift a pack. Besides being an aggressive advertiser, Cadbury has also made sure it's created buzz around the brand at the right time in the right place. Be it on the streets of Ahmedabad or Kolkata or ferrying people from Mumbai to Delhi during Diwali, Cadbury made sure it not just ruled mindspace, but also roadways and air ways (See: Time to Celebrate). Today not only does Cadbury command a lion's share of the non-traditional gifting space, it has 'inspired' companies like Britannia, Parle and even Pepsi and Coke to`launch their own version of gift packs. Fighting for shelf space with Celebrations from Cadbury is Rejoice from Amul, Occasions from Parle and Shubh Kaamnayein from Britannia. Nestle opts for the simpler moniker of 'Assorted Gift Packs'. While most experts we spoke to struggle to give a market size, Cadbury pegs the branded food gifting market to be worth ` 500 crore, half of which comprises only chocolates. "The Celebrations' brand is around ` 200 crore, which is incredible for a homegrown brand created and conceived in India," says Srivastava.

says rural markets will bring in the next era of growth. Cadbury may have 'showed the light' to many brands, but for 70-year old Mumbai based regional brand Fantasie Chocolates, cocoa has been a way of life for a long time. Zeba Kohli, proprietor, Fantasie Chocolates, gets orders even on Republic Day and Independence Day besides festivals. Weddings are another great demand driver, she says. Kohli attributes the longevity of Fantasie to the passion and creativity of the brand. Sample this. Fantasie has conducted chocolate-themed fashion shows, chocolate sculpting events, introduction of chocolate body paints and fun fairs. "I like to stimulate people when we do something related to chocolate. If there is a new flavour that we are launching, we do a small event to unveil it," explains Kohli. Today Fantasie caters to clients across the country although its retail presence is restricted to Mumbai and Pune. While Vishwanathan says Cadbury doesn't want to antagonise mithaiwallas, the reality is different. Bisen of Technopak says there has definitely been a drop in sale of Indian mithai: "Some media reports peg a 30% drop in sale of dairybased Indian sweets, which has a ` 2,500 crore annual market," he says. He attributes this dip to incidents of adulterated sweets that hit national headlines and eroded consumer confidence in the offering. Another interesting change is happening in the mithai shops itself. "Retail shelf space for mithai has gone down. Today colas, packaged food, chips occupy considerable space. There is not much difference between a kirana shop and a

sweet shop today," says Bisen. Parle launched Occasions three years ago and according to Pravin Kulkarnii, marketing head, Parle Products, the brand was launched because the company sensed an opportunity. "Food gifting s a growing market and Parle enjoys a good equity for our product among customers. There have also been many increments in our portfolio. Therefore we decided to launch gift packs," says Kulkarnii. The brand has sold 150 tonnes of its products during the Dasshera to Diwali season, every year since launch according to Parle. The range is available across country and Kulkarnii says there is good demand for its products even in Class 2 towns. On the advertising front Parle has been quiet so far, but Kulkarnii says that will change as they get aggressive in media from next year. According to Britannia, the festive season starts pre-Diwali and continues till Valentine's Day. Shalini Degan, category director - delight & lifestyle, Britannia says: "Our gifting mix is designed to add joyous moments, transforming them into delightful memories. We have judiciously priced (Rs 100 upwards) this entire range to make it available to everyone who wants to share good wishes." It causes the company to tailor its product mix and incorporate new products even as it repackages old favourites from its stable. When asked for a reaction to this new found interest in the space by other brands, one can sense some discomfort in voice of Cadbury's Vishwanathan. "As long as people are investing to grow the market, it will be good, as the overall pie will grow. But right now most people are only riding on a ready-made platform built by us," he says. Time to Celebrate Sisters Street: Cadbury dedicated a street for sisters in Mumbai and Maninagar (Ahmedabad) called "Cadbury Celebrations Sisters Street." The Sisters Street, had banners with personalised messages from brothers to their sisters, on every building. This initiative was based on insight that no matter how much a brother loves his sister, he finds it difficult to express his feelings. Cadbury Mishti Shera Shrishti: This activity was aimed at redefining the mithai-eating habit of Kolkata. As a part of the activity Cadbury India tied up with leading mithai shops of Kolkata like Balaram Mullick & Radharaman Mullick and KC Das among others. The city of Kolkata was divided into nine zones, with each representing a mishti chain. With a single mithai made with Cadbury Dairy Milk costing anywhere up to Rs 60, sweet shops took the initiative to create variants like Choco Twister, Choco Kumbha, Choco Riceball, Choco Fusion, Kolaberi Di and Choco Mudpie.

Beverages & Food Processing Times-Nov-II-2012


Beverages & Food Processing Times-Nov-II-2012



Invest Madhya Pradesh October 2012: Potential of Foreign Investment in Madhya Pradesh


adhya Pradesh has a lot to offer for those who choose to invest in this state as the primary, secondary and tertiary sectors registered high growth rates of 8.75%, 11.11% and 10.08% at current prices during 20072012 A report by Madhya Pradesh Trade and Invest ment Facilitation Corporation (TRIFAC) shows that this second largest state of India showed an impres sive CAGR of 12.7% during 200510. It is a well connected state and investors can le verage its mammoth road network of 99, 043 Km and railway network of 5,992 km. National High ways of 4,885 km cross Madhya Pradesh and this includes routes of DelhiMumbai, DelhiChennai, Delhi Bangalore and DelhiHyderabad. In total there are 18 National Highways and 10,249 km of State Highways. In June 2012, more than Rs73 crore has been sanc tioned for 23 road construction projects in various divisions of the State, according a report by Indian Daily Pioneer. Once completed, these constructed roads will cover a total distance of 120.91 Kms. In addition to these roads, recommendation for the construction of two bridges had also been made by the standing finance committee of the Public Works department. More than 400 trains pass through Madhya Pradesh each day and about 200 trains pass through the state capital Bhopal alone. More trains are set to join the already impressive number as during the Rail Budget 201213, Railway Minister Dinesh Trive di announced that Indore will get new trains and a new diesel engine factory will be set up at Vidisha. The state is well connected by air route also with major cities of India such as Delhi, Mumbai, Ahmedabad, Hyderabad, Kolkata and Raipur. Five operational airports serve the country in the fol lowing cities: Bhopal, Jabalpur, Gwalior, Indore and Khajuraho. Madhya Pradesh is also the first state in the coun try to offer air taxi services. In September last year, the state's Chief Minister Shivraj Singh Chouhan gave the green signal to the air taxi service at Bho pal's Raja Bhoj Airport. This state is also linked to Kandla Port, Jawahar Nehru Port Trust and other ports. There are forty three major industrial growth centers and 186 industrial areas in the state that also boasts excellent support infrastructure. It already has an installed capacity of 9,437 MW and an UltraMega Power Plant (UMPP) with an installed capacity of 3,960 MW is under way. Support infrastructure also includes a solid pipeline network including Hazira BijaypurJagdishpur (HBJ) pipeline; Malla

varamBhopalBhilwaraVijay pur pipeline network; and KakinadaHyderabadUran Ahmedabad natural gas pipeline. The state government has estimated the annual runoff in the state river to be 81,523 mcm and has identified the potential of 56, 857 mcm for irrigation purpose. The teledensity or (telephone connec tions per 100 persons) is 57.6 % and inves tors will find all major service providers to be present in the state. The TRIFAC shows that project worth US$ 10.7 million has been sanctioned for the support infrastructure category. These funds will be used to collect and treat the entire solidwaste in the state. Range of Investment Opportunities There are several investment opportuni ties in the state that has many established and emerging engineering and automobiles sector. There are more than 800 manufac turing units in Bhopal and more than 100 auto component manufacturers in the state. Madhya Pradesh remains the largest pro ducer of automotive radial tires in India and the government has invested in infrastruc ture to further assist the industry growth. Investors can consider putting their money in auto components, engine and engine parts, suspension and braking parts, Transmission and steering parts, electric start mechanisms, electronic components for consumer and industrial applications, power generation and transmission equip ment and machine tools. Madhya Pradesh recently had its second Audi showroom in Bhopal. The car already has a 50% market share in MP and expects a larger market share with this new dealer ship. “I am delighted to announce the open ing of Audi Bhopal showroom in Madhya Pradesh. With stateoftheart showrooms in both Indore and Bhopal, we are confident of offering an unmatched level of luxury to our growing customer base in Madhya Pradesh,” said Mr. Gaurav Anand, managing director, Audi Bhopal (Anand Cars Private Ltd). “Audi's global leadership position, its strong No. 2 position in India and its unpar alleled commitment to luxury is what has driven us at Anand Cars Private Ltd to de liver this worldclass showroom” The state is also inviting investors in the Pharma sector as Madhya Pradesh is a key Pharmaceutical hub in India with Pharma trade of INR60 billion (US$1.2 billion) and Pharma manufacturing – INR35 billion (US$0.7 billion). It has more than 350 pharmaceutical units located in several industrial areas and has a total of 94 BPharma and 37 DPharma colleges. Investors are offered land for mega projects at concessional rate of 75%, 200% FSI for biotechnology units operating in biotechnology park and 100% exemption on stamp duty for Herbal and Ayurvedic based Industries. Although Bangalore in Karnataka and Hyderabad in Andhra Pradesh are consid ered to be silicon hubs of India we have an

upcoming IT hub in Madhya Pradesh that is responsible for software exports of INR2.5 billion (US$50 million). The state boasts the presence of re nowned college Indian Institute of Infor mation Technology in the historic city of Gwalior. This educational facility had an intake capacity in Engineering and M.C.A stood of more than 100,000 in 201011. Investors are encouraged to put their money in Software Technology Park Indore –1, 00,000 sq ft of space; Crystal IT Park In dore –5, 50, 00 sq ft space (first phase); Hard The state government is offering 100% luxury tax and 100% entertainment tax exemptions to the potential investors. Good return on investment is expected on investments in hotels, resorts, amusement parks, religious tourism, wellness tourism, aqua tourism, rural tourism, and heritage tourism.ware & Software Technology Park Bhopal, which is being developed over 200 acres of land near airport; IT Park Gwalior; proposed knowledge city in DMIC investment region; and massive infrastructure buildup across investment corridors of BhopalIndore and BhopalBina. Investors like IT giant Infosys has already recognized MP's potential and announced 13,000 jobs in the state earlier this year. “We have also got a proposal from Tata Consultancy Services (TCS) for inking an MOU for setting up IT facility in the Super Corridor,” Madhya Pradesh Industries Min ister Kailash Vijaywargiya told PTI. The ambitious Rs 98crore Super Corridor connects Indore and Ujjain. IT is not the only area that is making news in Madhya Pradesh. Tourism in the state is also increasing and according to TRIFAC, 38 million tourists arrived in MP in 2010. The state has been decorated with many awards at the national and international level. It won the Best Professional Market ing award – ITB Berlin in 2012. It also re ceived First Best Tourism State in 2011 and Best Publicity Material award in 2011. Madhya Pradesh has a total of 382 tour ist sites and 292 centrally and 250 state protected archeological sites. This includes many museums, heritage, wildlife and pil grimage sites. The state government is offering 100% luxury tax and 100% entertainment tax ex emptions to the potential investors. Good return on investment is expected on invest ments in hotels, resorts, amusement parks, religious tourism, wellness tourism, aqua tourism, rural tourism, and heritage tour ism. In agriculture & food processing sector, Madhya Pradesh experienced an impressive growth of 10.2% in 200910 by leveraging more than 23 million hectares as cropped area. The state has a total of 6 food parks, about 180 industrial areas, 4 foodfocused industrial clusters and 5 agri export zones. Said to be the most agriculturally diverse state in India, Madhya Pradesh has 812 agrobased food processing companies that give employment to about 18% of the state's to tal industrial workforce. The government is offering attractive policies to the investors such as 5% interest subsidy, 100% mandi tax and entry tax exemption

and land at con cessional rates of 75%. Investment opportunities are available in the areas of direct procurement, infra structure development, food processing and value addition. Madhya Pradesh is focused on achieving an annual farm growth of 12 percent in the current five year plan (201217). “The agriculture sector in the state had grown on an average rate of around 10 per cent in the 11th Plan,” Madhya Pradesh Agriculture Production Commissioner N N Upadhyay told reporters of Jagran. “We target to achieve 12 percent annual growth rate in 12th Plan.” TRIFAC report also suggests mines & minerals sector in Madhya Pradesh as an interesting opportunity for the investors be cause this state is the number one producer of Diamonds, Pyrophyllite, and one Copper Ore. It is the number two producer of Rock Phosphate and number three producer of limestone and manganese ore. Good return on investment is expected for those putting their money in dimension al stone industries/stone parks; limestone based industries; zinclead based industries as well as alloy and super alloy industries; cutting and polishing units for sandstone/ marble; and copper ore refineries. Madhya Pradesh is also a traditional hub of Textile Industry in India and recorded ex ports of about INR16.25 billion (US$325 mil lion) in 200910. Investors are encouraged to put their money in readymade garments and make use of Indore SEZ that has ready available infrastructure for large units. The state government points out that its textile industry aims to have 7 percent of spindle capacity in the coun try by 2020. The industry offers a range of opportunities for cotton ginning and yarn spinning mills, power looms and hand looms, apparel designing and retailing, technical textiles and dyeing and coloring units. Power is also one area that promises good return for the investors. The state's total installed power generation capacity stood at 8998 MW on March 2011. It also has the first domestic coal based Ultra Mega Power Project (UMPP) awarded in the coun try and posses various sites that are ideal for harnessing wind energy. Investment opportunities in the power sector include merchant power plants; transmission & distribution metering; cap tive power plants; switchgear and trans formers; logistics development for fuel sup ply linkages; and power equipment such as transformers, boilers, turbines and others. In May 2012, India's largest solar power developer Welspun Group won a 125 MW solar photovoltaic project in Madhya Pradesh. The company will now put up one solar photovoltaic project of 100 MW and another of 25 MW capacity. “We bid Rs 8.05 per unit to bag the 125 megawatt (MW) out of 200 MW that was auctioned by the Madhya Pradesh Govern ment,” said Welspun Energy Ltd managing director, Mr Vineet Mittal. “Solar energy will become a gamechanger and I expect it will reach grid parity by 2015.”

Beverages & Food Processing Times-Nov-II-2012

Company report


An Irrigation system that has changed the lives of millions of farmers


ain Irrigation changed the lives of millions of farmers with its modern drip irrigation systems, till government finances threatened to scupper its model. Now, founder Bhavarlal Jain is fighting back with a new plan. Bhavarlal Jain Award: The good company award Age: 74 Why He Won: For impacting the lives of over three million farmers by helping them shift to more scientific and sustainable agriculture. His Trigger: Inspired by the credo 'Agriculture—a profession with a Future', he gave up a career in law and moved towards trading and manufacturing agri products. His Mission: To give back to society. Based on Gandhi's notion of trusteeship, where wealth belongs not to an individual but should be used for the benefit of the community. His Action Plan: Developing businesses and products that help farmers produce more with less. His Next Move: More products and appliances for agriculture based on solar energy. Increasing contract farming, food processing and spice production. Building large irrigation projects for state governments. It's one of a kind. A train hitched to 50 or sometimes 70 specially designed container wagons that carries only bananas. Packed to the hilt once every week, it chugs along from Bhusawal in Maharashtra's Jalgaon district to the markets at Azadpur Mandi in Delhi. Since it started regular services in September, the 'Banana Express' is fast becoming a symbol of the increasing agricultural abundance in the area. The region has been producing fruit for over a century, but harvests have rarely been as consistent or remunerative as in the last few years. Raver taluka in Jalgaon is recognised by the state government for generating agricultural income of over Rs 5,000 crore every year. But it was not always like this. Much of the profusion can be attributed to changed agricultural practices in the last 10 years. Using tissue-cultured saplings to produce better quality fruit has enriched the 150 sq km area that produces a fourth of India's bananas. Nearly all of the acreage is now irrigated by micro (or drip) irrigation systems. A lot of the change is driven by one man's persistence and vision of creating shared value for his customers. For close to three decades, Bhavarlal Jain, founder and chairman of Jain Irrigation, has led the charge to convince farmers to change their ways to make them more sustainable and profitable. He has also built a business that is unprecedented in terms of impact on the lives of millions of farmers around India. By now, power cuts and declining water tables all over the country have made the benefits of micro-irrigation apparent in various soil conditions. What was earlier limited to orchards has found acceptance in other crops. Bhau (as Jain is addressed

by all and sundry), no longer has to preach to the converted. He works through a network of associates, who take dozens of other innovations in the entire food production chain to the farmer. The systems that Jain pioneered are now being used in many other water-stressed states and have won global acclaim and innumerable awards. His farmers have been to Harvard Business School to present their story. His four sons—Ashok, Anil, Ajit and Atul—who look after operations have taken the company global. Some of the growth has been through acquisitions. Anil, managing director of Jain Irrigation, represented the company at the G8 summit on food security earlier this year—US President Barack Obama and the secretary of state were among the key speakers at the event. Paradoxically, despite rapid growth in sales, keeping the business profitable has become tougher. The systems Jain Irrigation sells cost roughly USD 1,000 a hectare to install. Most small and medium farmers depend on liberal state subsidies, often to the extent of 50 percent to 70 percent of the cost, to fund the purchase. Recovering this from cashstrapped states is proving to be harder every year. Populism has seen some states promise 80 percent to 90 percent subsidy. But dues are not cleared for months, creating liquidity problems for the Jains who have already supplied the equipment. In the first quarter of this financial year (April to June 2012), Jain Irrigation posted a loss of Rs 16 crore. They came back into the black in the second quarter with a small net profit of Rs 36 crore, it is clear that the situation has reached a tipping point. Tough Love and new beginnings Fixing the model, without damaging the farmer's interest, is a tough problem that Jain and his team have been grappling with for the past two years. The farmer is the pivot of Jain Irrigation's business philosophy. Former Sebi chairman DR Mehta, who is on the board, says Jain's concern for the farmer dictates his business. He recounts one board meeting last year, when profitability was under pressure. Jain surprised everyone by leading a discussion on whether the company should cut its margins, so that the farmer could benefit more. Mehta, who has spent a lifetime in philanthropic activities, says he had never heard of anything like this before. The sentiment is echoed down the line. Anil Jain says, "With uncertainties like weather or crop diseases, risks that farmers take are often much higher than any entrepreneur." But the problem for the Jains is that their customers have become used to buying the equipment by paying only 10 to 15 percent of the cost. The rest is usually a combination of credit from suppliers and state subsidy that they don't have to bother about. With dues mounting to Rs

1,750 crore this year, Jain says there was no option but to change the business model. In June, he took the first step and stopped selling on credit. The impact on product sales was immediate. Sales went down by almost 35 percent as farmers balked at the idea of paying the entire amount upfront. For many of them, loans were difficult to get or too expensive. On Dussehra day, Jain Irrigation launched its next move. A new Non Banking Finance Company (NBFC) called SAFL (Sustainable AgroCommercial Finance Limited) began disbursing loans to their customers. The farmer receives subsidies directly from the government and can repay the amount. "The loan is like a bridgefinance till the farmer is able to pay," explains Arvind Sonmale, a career banker, who heads the venture. SAFL will charge 2 percent more interest than commercial banks and the farmer has to bear the interest cost till the loans are repaid. Washington-based development institution IFC has 10 percent equity in SAFL, with Jain Irrigation taking up 49 percent. Banks and financial institutions will make up the rest. "Getting farmers to change the way they buy the equipment will need a mindset change," says Sonmale. He hopes to disburse Rs 200 crore by the end of this fiscal. DR Mehta says despite the initial hiccups, the new system is more sustainable. Jain Irrigation's receivables from states will go down and so will the interest cost. The balance sheet will be cleaned up since the loans will be on the NBFC's books, he says. The loss in sales will be made up by the lower interest burden on the company. From his headquarters in Jalgaon, Jain could well play the masterstroke that could be the key to making the NBFC a success. As SAFL rolls out, he has begun rallying his network of 3,000-odd equipment dealers for support. Most of them have sold Jain products for decades. This week, he invited 700 of them to his office for a presentation. He began with a slideshow with photographs from his own life and theirs—showing how prosperity had changed lifestyles over the years. "All this is threatened if they continued with the old ways," he said. With outlets in the villages, dealers are closest to the farmers and can convince them to opt for the loans, he says. They know the customer and can help with the formalities as well as assist with the recovery. "It's a Herculean task, but

it's the only chance we have," he says. Ethical Entrepreneurship Creating a shared value framework has never been easy for Bhavarlal Jain, whose ancestors were farmers who migrated from Rajasthan to Maharashtra in search of water. He says his entrepreneurial journey has been full of ups and downs. "I've been written off at least four times in the last 30 years," he says. "These were times when people, including close friends and family, have said that I will not recover." He recalls the story of a PSU bank chief who had initiated bankruptcy proceedings against Jain Irrigation for dues of Rs 5 crore. When Jain invited him to visit the plant, he said, "I don't care if you've built a Taj Mahal there. You are defaulting on my funds." Jain took the insult in his stride and was able to finally pay back the money. He had the last laugh a few years later when the same bank chief wanted to be part of a consortium set up to lend Rs 250 crore to the company. The last time he was written off, rather publicly, was during the late '90s, when Jain Irrigation borrowed money to diversify into a dozen unrelated businesses—like computer hardware, granite processing and financial services. Retribution was quick, both from the markets and lenders. Stock price fell to Rs 2 and lenders sued for bankruptcy. In 1997, he surprised everyone with a public apology to his customers and investors, and got printed on the front page of The Economic Times. "Early success had blinded us and we thought we could do no wrong," says Anil, who was at the helm right through the troubled period, as he is now. "Each of the businesses seemed like good entrepreneurial calls to take at the time.

Continued on ...................8

Beverages & Food Processing Times-Nov-II-2012



Continued From ...................7 We thought we could add value and earn margins in granite processing, for instance," he says. But demand from overseas for the finished product vanished almost overnight. Realisation dawned when the mothership began sinking. It took about five years to get rid of the unrelated activities, to find an investor to recapitalise the company and to subsequently pay them off and reclaim control over the company. Jain Irrigation returned to even keel in 2005. It has since been much more focussed. The four businesses it picked were agricultural inputs, food processing, plastic products and renewables. "The logic for being there is clear. All these are core to the farmer and each one helps in reviving rural India," says Anil. This improved focus was reflected in Jain Irrigation results for the next five years starting 2005. Revenues grew by 46 percent on average and earnings zoomed 70 percent. The group has been able to achieve scale on a variety of products. It is now the largest maker of plastic pipes in India and the second largest producer of drip irrigation equipment in the world. Of course, the run came to a grinding halt as cashstrapped state governments started delaying payments from 2011. Growing Roots among Farmers Bhavarlal Jain says companies are driven

to take on acts of corporate social responsibility, led by rising expectations of the world around them. But it can only be superficial unless it comes from within. "Many companies outsource this work to an NGO. What matters [is]: Are you moved by what you do?" he asks. Some entrepreneurs have mission statements which focus on maximising shareholder value, says Jain. They are probably thinking of themselves, since they are often the largest shareholders, he quips! The capitalist model of doing business often tends to ignore society, says Jain. Miles away from his office, Harish Patil is a small farmer who grows watermelon and cotton in a rocky field. He uses drip irrigation systems made by the Jains. But as much as the systems, he is also in touch with the company's 'associates' and employees, who visit at least once or twice a fortnight. They offer advice on seeds, saplings, crop spacing, pesticide, irrigation and even buyback deals for the fruit. Patil's early lesson (on water conservation) from them was, "Don't irrigate the soil, irrigate the plant." He now manages a good crop with just three hours of water supply a day. Over the years, Bhavarlal Jain has built a team of agronomists, who train the associatesâ₏�hired from the region to keep in touch with the farmers. VB Patil, manager, agronomy and training, is one

of them. He takes pride in the fact that he has worked for the state government, for an MNC chemical company, for a seed company before moving to Jain Irrigation. He heads the team of 100 associates working in Maharashtra. Similar teams exist in other states. They specialise in individual crops, and are able to handhold the farmer right through, Patil says. He is in touch with pretty much all the important agricultural as well as social events in the farmer's life. Very few companies have this kind of network. "We are around for weddings as well as funerals in the family," he says summing it up. The Jain way 'Aparigraha', the concept of nonpossessiveness, inspires much of Jain's business and life. He has decided that 85 percent of his wealth would go to a trust that works for social good. He admires the work that the Tata Trusts are doing and is studying their model to see what could work best for the Jains. On a practical level, this principle is applied in the company almost daily. Jain Irrigation has labs for R&D in seeds and tissue culture, and work on various innovations. Yet, the company will not file for any patents. "The idea is for people to use the innovation and maybe even make it

cheaper or more effective," says Sunil Deshpande, senior VP, food processing. The most recent example of this is an onion-seed planting machine, developed by the company. A conventional agriplanter, costing about Rs 50,000, was of little use in small farms, apart from being expensive. This machine costs Rs 15,000 and the company has sold it to people who want to reverse-engineer it to make it cheaper, he says. Jain Irrigation's mission is to 'leave the world better than you found it'. Jain's decisions as a businessman are often based on this. "I have a negative list of businesses," he says. "I will, for instance, never enter mining, or any business that makes money from human weaknesses." Sticking to this philosophy often affects the bottom line. Coca-Cola is a big customer for mango pulp, used in its fruit drink Maaza. It has suggested that the Jains extend their preferred supplier status to start providing sugar needed for its beverage business. But Jain has not allowed this so far. Reason? Growing a water-guzzling crop like sugarcane in Maharashtra, where the water table is so low, is criminal, he says. "We are here not just for this quarter or this year," says Jain, taking a dig at market analysts. "Our customer is the primary producer. We will both be here for the next hundred years, or five hundred," he says.

Synthetic meat to be a new concept L

ab-grown meat appearing on the supermarket shelves sounds like a science fiction? A city NGO Sukrut Nirman Charitable Trust (SNCT), fighting to curb cow slaughter in the region, is in touch with Dutch researchers who are working on developing synthetic or test-tube meat, taking a small amount of cells from a living animal and growing it into lumps of muscle tissue in the lab which can be eaten as meat for human consumption. Scientists believe synthetic meat, besides avoiding killing of animals, could help reduce the environmental impact of meat production. The technology to develop artificial meat has been around since the turn of the century. National Aeronautics and Space Administration ( NASA) once looked into developing for their astronauts - but making an edible and commercially viable product has remained out of reach. The issue was discussed at the 58th International Congress of Meat Science and Technology (ICOMIST) at Montreal in August. One of the topics among a host of others included in vitro meat, also known as synthetic or cultured meat, by Dr Mark Post from University of Maastricht, Netherlands. Dr N N Zade, head of department of veterinary public health, Nagpur Veterinary College, also attended the

meet. Cultured meat is an animal flesh product that has never been part of a complete living animal. It may be one of the several new technologies needed to maintain food supplies. Zade says such meat is produced in vitro, in a culture cell, rather than from an animal. It is produced by taking number of cells from a farm animal and

global population for a year. After the cells are multiplied, they are attached to a spongelike scaffold and soaked with nutrients. The resulting cells can be harvested, seasoned, cooked, and consumed as a boneless, processed meat such as hamburger or chicken nuggets. Dr Post says cultured meat has its own advantages concern with animal

proliferating them in a nutrient-rich medium. Dr Post claimed cells are capable of multiplying so many times in culture that in theory, a single cell could be used to produce enough meat to feed

welfare and public health. It has the potential to be healthier, safer, less polluting, and more humane than conventional meat. Founder of Sukrut Kanakrai Savadia believes that cultured meat production

can be more efficient than conventional meat in its use of energy, land and water. "More importantly, while making cultured meat it not necessary to kill an animal. Only a muscle biopsy from a live animal is to be collected and culture the isolated cells. In India, cultured meat will be like a boon," Savadia feels. Savadia adds it will also produce less waste and may prove vital, especially in countries like India, which is losing valuable livestock due to meat production to satisfy export demand. Savadia plans to meet Dutch scientists along with some local experts on the issue soon. As per the United Nations Food and Agriculture Organization (FAO), 6.2mmt (million metrictonnes) of meat is produced in India annually. The per capita animal protein consumption in India is 10.4 gram per day compared to world consumption of 25 gram per day. The FAO estimated that 18% of global greenhouse emissions are accounted for by the livestock sector, and demand for meat is expected to double. To prevent further loss of animals, cultured meat was the better solution. Dr Post hopes to satisfy at least part of the country's demand by making the stuff in factories.

Beverages & Food Processing Times-Nov-II-2012

Food Ingredient News


Mondelez to invest in cocoa production in India, Africa


the confectionary and grocery businesses and has been put in charge of Mondelez, had said that she was keen to see the company in the top five list of food majors

despite a slowdown in discretionary food spends. This has partly to do with the action initiated by the company on the brand front.

The company, which has brands such as Cadbury and Oreo, will work closely with cocoa producers in these countries as well in the Ivory Coast, which is the largest cocoa-producing country in the world. The development comes at a time when Mondelez is looking to increase revenues from emerging markets. The company already derives a sizeable chunk of its $35 billion revenues from markets outside the US. But faced with the prospect of slow growth in developed markets, it has been turning its attention to markets such as India, China, Brazil and Russia in the last few years. During her first official visit to India last year, Kraft's global chairperson, Irene Rosenfeld, who initiated the split between

in the country. India currently remains small when compared to Brazil, Russia and China for Mondelez. But the business in India has been growing at over 25 to 30% per annum over the last few years. The company closed the 2011 calendar year with sales of Rs 3,359 crore a growth of 35% over the previous year. The company is likely to retain this momentum in the current calendar year too

Mondelez has integrated Kraft brands Oreo, Tang and Toblerone - which were distributed independently in the country prior to the $19.7-billion acquisition of Cadbury in 2010. Since then Mondelez has rapidly gained share in categories such as biscuits, which were new areas for it. In chocolates, it retains leadership through Cadbury, which has an over 70% share in India. In biscuits,

ondelez International, which was recently formed following the separation of the confectionary and grocery businesses of American food major Kraft, has announced that it will invest $400 million (or Rs 2,200 crore) into cocoa production in India, Ghana and the Dominican Republican over the next ten years in a move aimed at securing supplies.

it has a share of about six to seven%. In a recent interaction with Business Standard, the company's director, snacking & strategy, Chandramouli Venkatesan, had said that it was looking to consolidate its presence in cookies and creams, which constitutes 40% of the Rs 12,000-crore biscuit market by value, higher than the staple glucose segment. Oreo is a cream cookie. The company recently launched a chocolate cream variant of Oreo in addition to the classic vanilla variant, which is popular across the world. Kraft had priced this new variant at a slight premium to its vanilla flavour available at Rs 5, Rs 12 and Rs 25 respectively. The Rs 5 price point has been done away with for the new variant, with the company opting instead for price points of Rs 15 and Rs 30. It has also been pushing the new variant aggressively at retail outlets in a bid to improve penetration. The company also continues to innovate in categories such as powdered beverages with a thick format of Tang introduced earlier this year.

Low fat diet key to being slim: study S imply replacing fatty foods with low fat diets can help you lose weight- without any other form of dieting, according to new research. Researchers from the University of East Anglia demonstrate that weight loss can happen without actively trying to lose weight beyond simply choosing foods lower in fat. People taking part in trials also saw their waist-lines become slimmer, and levels of bad cholesterol decrease. The small but statistically significant reductions in cholesterols and blood pressure, suggest a beneficial effect on other major cardiovascular risk factors. The research included results from 33 randomised controlled trials, in North America, Europe and New Zealand, involving 73,589 men, women and children. Those taking part had varying states of health. Comparisons were made between those eating less fat than usual (intervention group) and those eating their usual amount of fat (control group). The effect on weight and waist line was measured after six months. Eating less fat reduced body weight by 1.6kg, BMI by 0.56kg per square metre and waist circumference by 0.5cm. All these effects were in trials in which weight loss was not the intended outcome, suggesting that they occur in people with normal diets. The weight loss happened quickly and was maintained over at least seven years. "The weight reduction that we found when people ate less fat was remarkably consistent - we saw it in almost every trial. Those who cut down

more on fat, lost more weight," said lead researcher Dr Lee Hooper from UEA's Norwich Medical School. "The effect isn't dramatic, like going on a diet. The research specifically looked at people who were cutting down on fat, but didn't aim to lose weight - so they were continuing to consume a normal amount of food," Hooper said. "What surprised us was that they did lose weight, their BMI decreased and

their waists became slimmer. On top of this, they kept their weight down over at least seven years. There isn't a specific goal, the more fat you cut down, the more your weight falls," Hooper added. "We didn't consider different types of fat in this study. But cutting down on saturated fat reduces our risk of heart disease and strokes, so the healthiest way to cut

down on fat is to cut down on saturated fats," Hooper said in a statement. "This means having low fat milk and yogurt, cutting down on butter and cheese, and cutting the fat off meat. Most importantly have fruit instead of fatty snacks like biscuits, cake and crisps. And remember, this isn't a diet, so don't take it to extremes, but work out a way of eating that you can stick to permanently," Hooper advised.

Beverages & Food Processing Times-Nov-II-2012

Milk prices may fall up to 5 per cent after rising for six years


aught in an upward spiral since six years, milk prices may fall for the first time by up to 5% or Rs 1 - 2 per litre owing to oversupply driven by lucrative prices. People engaged in the cooperative dairy sector said milk powder and butter are already cheaper by 20%, and a correction was due in liquid milk prices. "Milk prices will drop by Rs 1-2 per litre

this month itself," says Samba Shiva Rao, president at Heritage FoodsBSE -1.45 %, a Hyderabad-based dairy. Rao supplies premium milk products to metros like Mumbai, Chennai and Bangalore and says, fall in liquid milk prices is imminent. "Market forces demand a correction. If we want to maintain sales and pay farmers in time, we really have no option but to go for a price cut," he says. Milk is supplied mostly by marginal farmers who need to be paid on a daily basis soon after delivery at collection centres. This year, supplies rose by 17% in Gujarat and by 20% in Andhra Pradesh. Cooperatives in Andhra have already sought the state government's permission to cut prices. However, a private dairy official in

Ahmedabad says, prices of retail pouches may not fall. "Only loose milk prices are down due to ample supply, but that may not cut retail prices," he says. Chairmen of two co-operative dairies affiliated to Amul brand do not rule out a trend reversal. "Going by the sharp rise in milk arrivals, a fall in prices is certain. We will be forced to cut prices in case others are doing so," said a chairman of a leading dairy under GCMMF, the largest cooperative network with 17 dairies and 30 lakh farmers as its members. Private dairies are reducing their milk procurement and this has diverted supplies to co-operatives, he said. Dairy experts say, the trend is not encouraging. If retail prices are cut, procurement prices would be subsequently lowered hurting farmers who can ill-afford a cut when cattle feed prices have shot up by 30%. Drought-like situation in Saurashtra region forced farmers to turn to animal husbandry. "Farmers now consume less milk and sell more to the dairies to earn more. As a result, a dairy in Saurashtra saw its daily procurement jump to 4.5 lakh litres as against its processing capacity of 3.5 lakh litres. GCMMF chairman Vipul Chaudhary told ET last month that cooperatives may resort to milk holidays or halt collections on certain days to combat oversupply. Subhash Mandge, chairman of the working committee at MP State Cooperative Dairy Federation, says leading co-operatives should give relief to consumer and effect a price cut. "After all, profit margins on liquid milk have risen over the years," says Mandge whose Federation sells milk cheaper by Rs 2 per litre than Amul.

Syrup used in biscuits and energy drinks 'fuelling diabetes on global scale''


sweetener that is used in food products like biscuits and ice creams could be

partly to blame for the rising rates of type 2 diabetes, researchers say.The syrup is commonly used in processed food items because it improves the appearance and provides a consistent browning after oven heating. According to the new study, countries that use large amounts of high fructose corn syrup (HFCS) have higher rates of the disease than those that consume little. Among 42 countries studied, the rate of diabetes was 8% in highconsuming nations and 6.7 among low consumers - a difference of 20%. “This research suggests that HFCS can increase the risk of type-2 diabetes, which is one of the most common causes of death in the world today,� the Daily Mail quoted Professor Stanley Ulijaszek from Oxford University, who co-led the study, as saying.

Corporate News


PepsiCo to double potato procurement in India in 5 yrs PepsiCo today said it is looking to double procurement of potato in India annually over the next five years from the current 2.4 lakh tonnes, a day after BJP leader Sushma Swaraj stated that the food and beverages major rejected local produce in Punjab.

"We work with around 24,000 farmers right now and last year we procured about 2.4 lakh tonnes of potatoes through contract farming and the programme continues to expand. I think, over the next five years, this figure should double," PepsiCo India Executive Director Vivek Bharati told reporters. The company is at present engaged in contract farming in seven states, including West Bangal, Punjab and Karnataka. During the debate on FDI in retail in Parliament yesterday, Swaraj had said that the most likely scenario would be that retail chains would not buy products from small and medium farmers at all and supported her contention by giving the example of PepsiCo in Punjab that rejected locally produced potatoes and tomatoes as being below standards. Asked for his comments on FDI in retail, PepsiCo India Chairman Manu Anand said: "FDI is being debated in the Parliament, we do not want to get into this debate. As far as our sector is concerned, it is 100 per cent FDI (sector). Well, the more the points of sale, the better it is always for the industry." Talking about its various initiatives for local people, he said the company has launched a community partnership initiative here, which will help conserve 400 million litres of water every year and help 7,500 people. The beverages plant here is the company's biggest unit in India. "We have improved the water efficiency at our Sangareddy plant from 2.65 litres of water per litre of finished beverage in 2007 to 1.88 litres in 2011, thereby saving 564 million litres of water," he said, adding the company has invested Rs 500 crore on this plant since 2006. Under the project, the company encourages people in rain water

harvesting and to form self-help groups. Talking about the Indian market, Anand said: "In the last four years, we have invested about a billion dollars and will continue to enhance that investment appropriately as the situation demands. It's

a priority market for PepsiCo." Without sharing details, he said India is among the top five markets for the company globally. "Important to notice today is that we have eight brands with sales over Rs 1,000 crore each and that continues to increase and go up every year," Anand said. The eight brands are Pepsi, 7UP, Mirinda, Slice, Mountain Dew, Lays, Kurkure and Aquafina. Expressing optimism on continuing good growth, Anand said the per capita consumption of both carbonated drinks and snacks is low in India compared to other emerging markets. "In India, the per capita carbonated drinks consumption is even half than Pakistan. So these categories continue to grow in double digit on sustained quarter-onquarter basis and we are really thrilled to participate in this growth," he said, adding the company will continue to add new products and has already introduced about 25 products this year. The company sells its beverages through about 1.5 million outlets, while it is available in over 2 million outlets for its food business. When asked about the company's strategy to become the title sponsor of IPL, Anand said: "The viewership of IPL is going up every year. In fact, it is something which brings about a huge amount of passion for the Indian audience in the month of April and May, viewership of IPL is just phenomenal. "Partnership between IPL and Pepsi is just fantastic partnership... I think we will add a lot to IPL and IPL will add a lot to Pepsi. We believe IPL is a great investment for us, it's a great property to partner with." Last month, PepsiCo became the new title sponsors of the cash-rich Indian Premier League after it won the bid for title rights for five years by paying a whopping Rs 396 crore.

Beverages & Food Processing Times-Nov-II-2012

Processing Waste


Must we waste money and energy on processing waste?


urgaon is a symbol of rapid economic growth that is evident in its high-rise apartments, glass-walled corporate buildings and dazzling malls. But alongside these tall buildings are also the rising heaps of garbage. This forces us to wonder if there is a significant link between economic growth and waste generation. As more and more people move into Gurgaon and create new lifestyles, we seem to be becoming active consumers of packaged food and use of disposables. Many more people are now buying even the daily dal makhani and shahi paneers off the shelf. Then there are the home deliveries of pizzas and mousses and soft-drink bottles. Milk comes in plastic pouches, and water in plastic bottles. The result is half a dozen plastic packets, paper boxes and bottles in dustbins every morning mixed with other kitchen and household waste, sometimes including hazardous materials like CFL bulbs and electronic parts. About 900 metric tons (900,000kg) of solid waste reportedly reaches the Bandhwari waste treatment plant every day from Gurgaon and Faridabad together - Gurgaon generating a larger

share. Close to half of Gurgaon's waste is non-biodegradable material containing plastic, glass, fabric, and similar material. However, this is only the garbage collected by the MCG and HUDA. There is also so much waste lying around in the streets and vacant plots and shopping areas, which if collected will probably drown parts of this modern city. Seemingly, in areas where poor people live, such as in the villages or unauthorized colonies, more garbage is visible. This is not because poor people generate more garbage. On the contrary, poor people recycle a lot, to the extent of even washing disposables like plastic plates and spoons, and reusing them many times. We see more garbage where they live mainly because unlike in developed colonies, garbage lifting services rarely reach the poor. In addition, as the city continues to be under construction, there is an increasing volume of construction waste (malba), with little space for dumping. So where is all the malba going, if not on vacant plots and roadsides? According to Harish Capoor, a socially active citizen who has been supporting the MCG on sanitation matters, "much malba is being disposed of in mined pits

in the Aravalis, directly impacting the biodiversity of this eco-sensitive area." Hygiene, cost and convenience are mentioned as top reasons behind the growing use of disposables and plastic, although plastics are known to have toxic elements that can be harmful to human health. There are others who argue that disposables save storage space and precious water which would otherwise be used for cleaning dirty utensils. Perception of risk to people's health from accumulating garbage is apparently low both among residents and the administration looking at the manner that the issue of garbage is treated in Gurgaon. The big question that remains to be answered is how to manage the growing volume of garbage efficiently, cheaply, and without harming human health or the environment. Landfill sites in urban areas are going to be limited. But more importantly, the negative impact from landfills in polluting groundwater and the surrounding environment is well known. Landfills therefore need to be discontinued. There is much talk about segregation of waste at the household level. This behaviour is possible and also inexpensive. But unless the Gurgaon

Innovative packaging helps firms save paper, attract customers to


hen Wrigley, the multinational confectionery brand, decided to do away with the extra paper sleeve around its chewing gum and went for slimmer packs, the company saved 745 tonnes of paper altogether in India, Europe and Russia Frooti, the popular mango drink, has gone through half-a-dozen variations in shape and style of packaging since 2004. The objective has been to catch the eye of consumers and tap rural markets with smaller packs. HEAT AND EAT ConAgra Foods' microwave popcorn introduced paper bags that can be microwaved as well as used as a container

hold the snack. For FMCG companies, packaging is not just about utility and inevitable cost but an integral tool that can grow their businesses, say senior research analysts Usman Shaik and Divya Kumar of Beroe Consulting, citing these instances to illustrate the point. These are lessons the paper and board industry can use to tap a growing market. The growth of organised retailing will drive strong awareness of packaging. The $17-billion Indian packaging industry is growing at 14-15 per cent, driven by increasing demand for packaging solutions amid rapid lifestyle changes. Foreign direct investment in retail will only spur this growth. Printed cartons

account for 17 per cent of the packaging industry, said Shaik, addressing the Fourth Annual RISI Indian Seminar on trends in the Indian paper industry. RISI is a multinational information provider on the forest products industry. Packagers should focus on this segment as manufacturers target rural markets where low infrastructure is driving the need for innovative packaging that protects the product while enabling ease of use and attracts customers, Divya Kumar said. Ajay Srinivasan, Director, CRISIL Research, said paperboard, which represents the packaging sector, accounts for about 5.3 million tonnes of the 11.5million-tonne paper industry. About 60 per cent is Kraft paper used in bulk packaging and the rest includes a range of products for consumer packaging. FMCG growth will drive this sector. KEY DRIVERS Organised retailing, about 7-8 per cent of total retail, is expected to jump to 20 per cent of retail business in five years. While demand growth for paperboard was slightly less than 6 per cent last year, and is the same this year, given general economic conditions, it is projected to grow from 2013-14 to 2017-18 at a compounded annual rate of over 7 per cent.The key drivers of this spurt will be pharmaceuticals, food, textiles and FMCG products.

administration takes responsibility of managing the system efficiently at its level, and makes the appropriate investments, citizens will be quickly discouraged to continue their effort. Therefore, as an experiment, a pilot project will have to be carried out jointly by the citizens and the MCG in a chosen locality and lessons documented. It can then be put into practise across the city in a phased manner. Alternative building material and techniques will have to be adopted to reduce mining in the Aravalis for concrete. Technologies for waste treatment are expensive, and the more garbage we create the more we will have to spend our public tax money on managing this waste. For a city like Gurgaon which prides itself of having a "conscious citizenry", it just does not make good sense to first create waste and then invest crores of rupees in technologies and processes to treat the waste. "Reduce, Reuse, Recycle" has been the global mantra for waste management across the world. It is time we added "REFUSE" to the list. We have to voluntarily refuse using material that can potentially generate hazardous waste.

Beverages & Food Processing Times-Nov-II-2012

Back Page


Cambodia best ASEAN market for Indian SMEs'


ambodia has recorded a growth rate of 10 percent since the last 10 years, and the time is right for the Indian small and medium enterprises (SMEs) to look at Cambodia as its key partner for accessing the ASEAN marke, Ambassador of India in Cambodia, Dinesh Patnaik said recently. Speaking at the Business Marker event - Small Business- Big Opportunities, in Phnom Penh, Cambodia, Patnaik viewed that Indian SMEs should look at the opportunity to be a part of Cambodian growth story. The Business marker event was organised jointly by the FASMEC and the Embassy of India, in Cambodia, earlier today. It coincides with the visit of the SME Delegation to Cambodia and the second edition of the ASEANIndia Car Rally in 26 November-20 December 2012, organized jointly by CII along with the Ministry of External Affairs, Government of India. Addressing the Business Marker event, Phok Sovannarith, Secretary of State, Ministry of Industry, Mines & Energy said that the India Cambodia

relationship is based on mutual respect and cooperation. Seeking support and cooperation of the SMEs from India, he mentioned that the Cambodian SMEs look upto the India to study their best practices and develop a globally competitive Cambodian Enterprises. K K M Kutty, Leader of the CII SME delegation to Cambodia and Past Chairman, of the CII National MSME Council, earlier reiterated CIIs commitment to guide the Enterprise to Enterprise cooperation, between India and Cambodia. SME represent a good low-investment high-return opportunity for Cambodian SME, who can source niche products from India. Indian SMEs are flexible, reliable, quality conscious, and adaptable. Intellectual property rights are well-respected in India as well, he added. Earlier, speaking on the occasion, President of the Federation of Association for Small and Medium Enterprises of Cambodia (FASMEC), Oknha Te Taing Por, mentioned that for Cambodian enterprises, it is useful seek

cooperation with the Indian SMEs, as there are many sectoral synergies between the two sides. The highlights of the Business marker event were the two (2) MoUs signed by CII with – FIRST, Federation of Association for Small and Medium Enterprises of Cambodia (FASMEC); & SECOND, Indian Chamber of Commerce (ICC).The institutional arrangement between CII & FASMEC and between CII & ICC, will enable the growth of trade and commerce between India and Cambodia. In addition, the Business marker event focussed on Women Entrepreneurship, by bringing together the Women Entrepreneurs from India and Cambodia. This underlines the vital role assumed by the Women Entrepreneurs for the development of national economies in both the nations. During the discussions at the Business marker, opportunities in the following sectors were stressed upon, between India and Cambodia in the SME domain : Agro-industries, Agricultural equipments, Rice Mills and equipments, Food Processing, Sea

Food, Hand and Machine Tools, Industrial Vocational Training / IT education / Engg & Medical, Textiles, Auto components, Logistics, Packaging and Railway equipment & construction / consultancy and Construction material. It is envisaged that the visit of the CII SME delegation to Cambodia will lead to cooperation in FOUR key areas : 1.) Capacity building 2.) Database Management 3.) Exchange of SME delegations and visit to Trade Fairs; & 4.) Collaborations with the CII Center for Excellence (CoEs) for R & D and Testing facilities. These would facilitate the enhancement of competencies of the Cambodian Enterprises through Joint Ventures and Technology transfers. India and Cambodia enjoy strong and warm relations based on ancient civilisation bonds. Hindu and Buddhist linkages go back to the 4th century, and Cambodia is famous Angkor Vat temple complex and other major sites are living testimony to these early contacts, according to CII.

Beverages & Food Processing Times Nov'12 (II)  

Indias first fortnightly Newspaper for Food & Beverages Industries.

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